Generally, we expect firms to be _________________ to issue callable bonds in lower interest rate environments because __________________.

a. More likely; because there is more room for the interest rate to improve thus making the call option more valuable.

b. More likely; because there is less room for the interest rate to improve thus making the call option more valuable.

c. Less likely; because there is more room for the interest rate to improve thus making the call option less valuable.

d. Less likely; because there is less room for the interest rate to improve thus making the call option less valuable.

e. Not enough information.